Jerash Holdings (US), Inc. Q3 FY2025 earnings call

• Business is gaining traction with increasing inquiries from new and existing customers looking to add manufacturing partners in tariff-free Jordan.
• Fiscal third quarter revenue impacted by port congestion in Israel Haifa Port due to geopolitical turmoil, but export trade rules improved since late January.
• New business interest from international apparel companies, supporting customer base diversification.
• Started expanding 2 existing manufacturing facilities, increasing processing capacity by 15%, with plans to expand further in Al-Hasa and assess long-term large-scale expansions.
• Factories fully booked through August, orders from global brand customers increasing steadily.

Fiscal 2025 third quarter revenue increased by nearly 30% to $35.4 million from $27.5 million in the same quarter last year. Gross profit for the quarter increased 20.6% to $5.4 million, but gross margin decreased to 15.2% from 16.2% in the prior year quarter. Operating income increased 88.3% to $708,000. Net income was $6,000 or zero per share compared to $232,000 or $0.02 per diluted share in the same quarter last year.

• Fiscal 2025 fourth quarter revenue expected to increase 50% to 53% from prior year quarter.
• Fiscal 2026 first quarter revenue expected to be in line with fiscal 2025 first quarter (record, including delayed shipments).
• Gross margin goal for fiscal 2025 fourth quarter expected to be approximately 15% to 16%, subject to logistics and shipping charges and product mix.
• Board approved regular quarterly dividend of $0.05 per share payable on February 25, 2025.

• Geopolitical turmoil in the region caused port congestion and shipment delays, impacting revenue.
• Uncertainties in the Middle East situation affecting operating environment and potential future shipments.
• Higher logistics costs and port storage fees due to geopolitical issues.

Q: Given talk about tariffs, could you quantify impact on conversations?

A: Already fully booked through end of August 2025, new orders in pipeline; expansion to add 10%-15% capacity by June, with further plans in Al-Hasa.

Q: Comment on U.S. consumer apparel demand and inventory?

A: Some customers still absorbing inventories, but 60% of customers planning new orders; fourth quarter usually slow, with considerations for overtime costs.

Q: Breakdown of logistics improvement and impact on gross margin?

A: Port congestion improved since January, exporting more timely; normalized gross margin anticipated around 15%-16% going forward.

Q: Plan for longer-term large-scale expansion funding?

A: Considered debt market, World Bank, open to financing opportunities, may use combination of equity and debt.